HomeMy WebLinkAboutMemo - Read Before Packet - 11/1/2022 - Memorandum From Heather Young Re: Updated Iqap Presentation For Council Meeting 11/1/22 - Agenda Item 20Utilities
electric · stormwater · wastewater · water
222 Laporte Ave.
PO Box 580
Fort Collins, CO 80522-0580
970.212.2900
V/TDD: 711
utilities@fcgov.com
fcgov.com/utilities
M E M O R A N D U M
DATE: Oct. 27, 2022
TO: Mayor and City Councilmembers
FROM: Heather Young, Utilities Public Engagement Manager
THROUGH: Kelly DiMartino, City Manager
Tyler Marr, Interim Deputy City Manager
Kendall Minor, Utilities Executive Director
RE: Updated IQAP Presentation for Council Meeting 11/1/22
Fort Collins Utilities staff will be attending the City Council Meeting on Tuesday, November 1.
The attached is an updated version of our Income-Qualified Assistance Program (IQAP)
presentation. It will be replacing the version included in the printed and published agenda.
CC: Gretchen Stanford, Deputy Director Utilities, Customer Connections
Shannon Ash, Affordability Programs Manager
Utilities Income-Qualified
Assistance Program
11-01-2022
Pilot Wrap-Up and Program Adoption Discussion
Heather Young, Sr. Community Engagement Manager
Shannon Ash, Utilities Affordability Program Manager
2Why We’re Here Today
• Seeking Council approval to make the Income-Qualified Assistance Program (IQAP)
an adopted program (yes, adopt ordinance or no, don’t adopt)
• Follow up on existing program structure
August:
Internal Utilities
Communication
September/October:
Boards and
Commissions
Communication
October 20:
Council Finance
Committee
November 1:
Council presentation
2022 Timeline
3Strategic Alignment
•Neighborhood Livability and Social Health (NLSH) 1.3
• Improve accessibility of City and community programs to low-
and moderate-income residents and increase participation in
services to eligible income-qualified residents.
•Our Climate Future
• Big Move 7 – Healthy Affordable Housing: Everyone has
healthy, stable housing they can afford
• Big Move 12 – 100% Renewable Energy: Everyone in the
community receives affordable, reliable, 100% renewable
electricity, including from local sources
Background
5IQAP History
2013-2018:
Low-income
program
discussions;
request from
Council to explore
further
2018:
IQAP launches as
a pilot program
2021:
Pilot set to expire,
Council approves
pilot extension
until 12/31/22
2022:
Decide on IQAP
program
6
Payment
Assistance
Efficient
Home
Efficient
Practices
Lower
Utility
Costs
How we help income-qualified customers reduce utility costs:
Utilities Affordability Programs
7Payment Assistance
Medical
Assistance
Program
(Discounted
Rate)
Income-Qualified Assistance Program
~23% rate reduction on electric, water, and wastewater services
Customers are approved through the Low-income Energy Assistance
Program (LEAP)
Customers are automatically enrolled/renewed in IQAP based on LEAP
approval
Customers must be at 60% State Median Income or lowerPayment
Assistance
8Income-Qualified Assistance Program Impact
•Assumes a 10% increase in program participation for 2023 and a 15% increase in 2024.
•Estimated total reach is 10,000 households using a city-wide poverty rate of ~16%, based on 2021 Census Bureau data combined with
controlling for the student population in Fort Collins (City Rebates Eval Report, 2019).
•At present, there are nearly 70,000 households in our electric service area.
755 759
1,727
1,900
2,185
0
500
1,000
1,500
2,000
2,500
2020 Participation 2021 Participation 2022 Participation 2023 Estimate 2024 Estimate
IQAP Participants
Program Update
10Auto-enroll
759
1,727
2021 2022
Average IQAP Participation
•
• One less application for customers to fill out
In 2021, we removed the IQAP application.
Now, customers enroll in LEAP and staff enrolls them in IQAP.
• Less staff time to process
• 87% of auto-enroll customers are satisfied or
very satisfied in the ease of auto-enrollment
11IQAP Impact
Energy Use Analysis
• Energy use from auto-enroll IQAP participants initially increased by 2.9% on average (220 kWh/year).
• This increase likely reflects that households are no longer as worried about paying their energy bills and are
choosing to keep their homes at a more comfortable temperature.
• By year three of enrollment, both IQAP and non-IQAP participants had similar energy use.
(20)
(10)
-
10
20
30
40
50
60
Dec-16 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 Dec-18 Apr-19 Aug-19 Dec-19 Mar-20 Jul-20 Nov-20 Mar-21 Jul-21 Nov-21 Mar-22 Jul-22 Nov-22
IQAP Participant Monthly kWh DifferencePandemic startsIQAP starts
12IQAP Impact
"The IQAP program is an integral and essential part of our lives. Being on a fixed income is difficult and this
program makes it easier to continue to live in this beautiful city we have called home for many decades. We
use the money we save each month to buy essentials such as food, insurance, fuel, clothing, shoes. We do
not waste it or spend it frivolously. Thank you for offering the IQAP."
Customer Survey
Annual survey opportunity for IQAP customers, questions included:
• What has been the biggest benefit of receiving the IQAP utility bill discount?
• Is there anything you would like to change about the Income-Qualified Assistance Program?
Benefit responses included:
• increased quality of life
• being able to save money for other expenses
• decreased stress with paying bills
• being educated on ways to conserve energy
• budgeting on a fixed income
When asked about changes
they would like to see to the
program, a larger discount
was listed repeatedly.
13Rate Reduction
• In 2021, Council requested that we evaluate whether a 23% rate reduction is still sufficient
• Methodology: Aim for low-income customers to spend a similar percentage on
utilities as someone who makes 100% of area median income
• Takes LEAP benefit and gas bills into consideration
• Recommendation: Increase rate reduction to 25% moving forward, evaluate every 3-5 years
Why? Since 2018, utility bills have
increased at a higher rate than
income.
14Annual Financial Impact
*Based on 1,727 enrolled participants. Prior projections estimated that 2,000 customers would be
enrolled during the pilot phase. Total cost is nominal (0.3% of $138M), would minimally impact other
Utilities customers.
23% rate reduction
(current)
25% rate reduction
(proposed)
Average annual discount/customer $220.50 $240
Average annual Utilities cost* $392,000 $415,000
With a 25% rate reduction, customers would save an average of
$20/month on their Utilities bill.
15Utility Purposes and Benefits
•Creates parity within the residential rate class as to the percentage of household income
committed to utility bills, compensating for income differences between low-income households
and households that earn 100% of AMI
• The nominal financial impact of not recovering a portion of participants’ monthly utility bills is
offset by administrative efficiencies, including:
•Timely billing payment, allowing Utilities to avoid incurring the costs of disconnection,
collections, or payment plans
• Increased participation in conservation programs that make low-income
customer dwellings more efficient and advance regional efforts to reduce utility
costs across the residential rate class
•Extended reach and cumulative benefits of Utilities conservation and efficiency
education that affects user habits in households that historically do not participate in
these efforts
• As customers continue participation, combined program education and incentives build trusted
community relationships and provide more access to energy usage data and building
insights that in turn allows Utilities to pursue environmental goals more aggressively.
Utilities programs are guided by Charter Article XII, Sec. 6 of code.
Question for Discussion
17Why Utilities Rate Reductions Are Needed
• Additional factors:
•Energy costs increase as we work towards carbon neutrality
•Climate change = hotter temps = more energy use
1) https://www.aceee.org/energy-burden
2) https://www.bloomberg.com/news/articles/2022-08-23/can-t-pay-utility-bills-20-million-us-homes-behind-on-payments-facing-shutoffs
•Utility costs continue to increase at a faster
rate than income, locally and nationally.
• Some customers are on fixed incomes,
especially seniors.
• Inflation means people have to spend
more of their income on basic needs like
utilities.
• Without access to heating, cooling, and
water, unpaid utility bills can have dire
health impacts.
• “It’s higher prices. It’s heat waves and
increasing needs for energy.” (2)
•Income disparity and energy inequity
exists in our community. Contributing
factors include race, ethnicity and low-
quality housing.
• “High energy burdens and energy
insecurity are well-documented and
pervasive national issues. Even in
2017, a time of economic prosperity,
well over one-quarter of all U.S.
households experienced a high
energy burden.” (1)
Should the Income-Qualified Assistance Program become an adopted Utilities program?
18Summary
• Adopting the Income-Qualified Assistance Program:
• Aligns with existing priorities and the role of a municipal utility.
• Invests in our community – the total financial cost is small compared to the customer
and community impact.
• Would have minimal impact to future rate increases, given current and projected
participation numbers and a 25% rate reduction.
• Is a responsible use of rate payer dollars because IQAP builds on existing benefits
through LEAP, leveraging this partnership to help share the cost.
19Question for Council
• Should the Income-Qualified Assistance Program become an adopted Utilities program?
• Yes, adopt ordinance
• No
THANK YOU!
21Median Income Explained
Number in Household Income Limit
1 $33,109
2 $43,297
3 $53,484
4 $63,672
5 $73,860
6 $84,047
Number in Household Income Limit
1 $45,120
2 $51,540
3 $57,960
4 $64,380
5 $69,540
6 $74,700
Colorado State Median Income (60%) - 2022 Larimer County Area Median Income (60%) - 2022
According to the 2020 Census, 16%of Fort Collins residents live in poverty.
census.gov/quickfacts/fortcollinscitycolorado
Outreach
•Engagement
• Monthly Utilities Insights newsletter
• Customer surveys
• Direct customer engagement at events and
through targeted outreach
• Participation in efficiency programs
•Outreach
• Increased outreach for the 2022-2023 LEAP
season. Events planned at the following:
-La Familia
-CSU (staff and off-campus students)
-Northside Aztlan Community Center
-Senior Center
-Old Town Library
-CARE Housing
22
*Materials are also translated into Spanish
Group Outcome
Energy Board – June 25, Sept. 8 Supportive of this program
Affordable Housing Board – Oct. 6 Supportive of this program
Council Finance Committee – Oct. 20
Water Commission – Oct. 20 Supportive of this program
23Boards, Commissions and Committee Feedback
24Utilities Affordability Programs
One-Time Payment
Assistance
• Payment Assistance
Fund
• Utilities Pandemic
Assistance
• Neighbor to Neighbor
Funding
Reduced Rates
• Income-Qualified
Assistance Program
• Medical Assistance
Program
• Digital Equity Rate
Retrofit Programs
• Larimer County
Conservation Corps
Water and Energy
Program
• Colorado Affordable
Residential Energy
Outreach
• Utilities Insights
Newsletter
• Direct customer
engagement
• Outreach to agencies
25Payment Assistance Fund
• Can receive funding once per season (Oct. 1 – Sept. 30)
• Bills must be past due
• 80% of Area Median Income
• Energy Outreach Colorado matches funds 1:1
• Contact partner agencies to receive funding:
• Neighbor to Neighbor – 970-484-7498
• Catholic Charities – 970-484-5010
• La Familia/The Family Center – 970-221-1615
• Discover Goodwill – 1-888-775-5327
• CSU (students and staff only) – 970-491-8051
Payment
Assistance
Fund
(One-Time
Assistance)
One-Time Payment
Assistance
• Payment Assistance
Fund
Funding source Where to apply
Customers
served
Number of
customers
served
(2020/2021)
Amount
distributed
(2020/2021)
Average
per
customer
Utilities
funds
remaining
Utilities Pandemic
Assistance Fort Collins Utilities Residential and
commercial 647 $296,386 $458 $466,712
Consolidated
Appropriations Act
Neighbor to Neighbor Residential,
income-qualified,
renters
898 $261,734 $291 ?
Payment
Assistance Fund –
Energy Outreach
Colorado
La Familia
Neighbor to Neighbor
Catholic Charities
Discover Goodwill
CSU
Residential,
income-qualified 1,443 $562,380 $390 $333,961
CARES Act Fort Collins Utilities
Residential and
commercial 1,423 $575,910 $405 $0
Total 3,528 $1.4 million $405.71
$1.1
million
26Financial Assistance During Covid
27Reduced Rate Programs
Medical
Assistance
Program
(Discounted
Rate)
Income-Qualified
Assistance
Program
Medical
Assistance
Program
Digital Equity Rate
Launched in 2018 with
Time-of-Day electric rates
Launched in 2012 Launched with Connexion
~23% rate reduction ~23% rate reduction $19.95/month rate
Qualifications:
• Approved through the
Low-income Energy
Assistance Program
(LEAP)
• Automatically
enrolled/renewed in
IQAP based on LEAP
approval
• 60% State Median
Income
Qualifications:
• Medically necessary
electric equipment or
air conditioning
• Physician certification
• 60% Area Median
Income
Qualifications:
• 60% Area Median
Income
Reduced Rates
• Income-Qualified
Assistance Program
• Medical Assistance
Program
• Digital Equity Rate
28Equipment Repair/Replacement and Efficiency Programs
LCCC Water
and Energy
Program
(Basic Retrofits)
Retrofit Programs
Larimer County
Conservation Corps Water
and Energy Program
Colorado Affordable
Residential Energy
Basic inspection of home,
appliances, windows, toilets and
heating/cooling system
Comprehensive upgrades
available for air sealing,
insulation, HVAC, windows and
appliances
Install efficiency measures Assessment and efficiency
measures installed
Partnership with Larimer County,
Loveland utilities
Partnership with Energy Outreach
Colorado, Xcel Energy, Platte
River Power Authority
Annual program targets:
• 350 assessments
• 175,000 kWh
• 1.9M gal water
Annual program targets:
• 40 upgrades
• 15,000 kWh
29Get FoCo App
30Charter Requirement and IQAP Purpose
Charter Article XII, Sec. 6:
All net operating revenues of the city’s utilities shall be held within the
respective utility’s fund and may be expended only for renewals,
replacements, extraordinary repairs, extensions, improvements,
enlargements and betterments to such utility, or other specific utility
purpose determine by the Council to be beneficial to the ratepayers
of said utility.
31Arrears Analysis
Process Step Cost
Send disconnect notice (Printing and mailing) $0.60
Actual disconnect $6.06
Collect payment $5.15
Reconnect service once payment is made $6.06
Send customers to collections $6.06
Total cost $23.93
• When we avoid disconnecting a customer, the utility saves ~$24/avoided disconnect in printing,
mailing, and staff costs.
32LIHWAP
Low-Income Household Water Assistance Program (LIHWAP) provides funds to assist low-
income households with water and wastewater bills.
• The City of Fort Collins is not able to participate in this program due to our current
billing system.
• Funds are required to only be applied to the water portion of the customer’s bill and
our current system does not allow payments to be separated per service.
• A new billing system is in the RFP process and will hopefully include the ability to
apply payments to specific utility services.
Colorado’s LIHWAP, which began in November 2021, is a temporary, emergency program
managed and operated at a state level by the Colorado Department of Public Health, where the
state is responsible for processing benefit payments to water service providers. Colorado’s
LIHWAP provides a one-time benefit payment for a maximum benefit amount of $2,000. To
determine the benefit level, Colorado will consider the amount past due to continue service or the
total amount to be paid to the water service vendor to re-establish water service by bringing the
household debt balance to zero.
• Enrollment in IQAP provides a year-round discounted rate on water and wastewater.
33LEAP and EBT Cards
The Low-income Energy Assistance Program (LEAP) program works to keep communities warm
during the winter (November through April) by providing assistance for heating costs, equipment
repair and/or replacement of inoperable heating tools. While the program is not intended to pay
the entire cost of home heating, it aims to help alleviate some of the burdens that come with
Colorado's colder months.
• The City of Fort Collins billing system does not allow for payments to be applied to
specific portions of a customer’s bill.
• Customers receive an EBT card in the mail for the benefit amount, withdraw the
money from the card, and apply it to their bill.
• Customer Care and Technology is requesting to implement a system that would allow
EBT cards to be processed as a form of payment.
34IQAP Customers
Legend:
• Blue area: Light and Power service area
• Pink area: Water service area
• Purple area: Both Light and Power and
Water service areas
• Green/yellow icons: IQAP customers
• Dark blue icons: MAP customers
35Mobile Home Park Support
For most mobile home parks in Fort Collins, the property manager/owner is the utility customer
for water utilities such as stormwater, wastewater, and drinking water, and the resident is the
customer for electric. In this case, a park will receive a bill from the utility company for the water
services, which they may choose to then re-bill to residents or include these utilities as a part of
the monthly rent. Residents that are electric customers will receive their own separate electricity
bill from their provider.
If residents are charged individually for water, the following rules apply: Each month, property
managers must provide water billing information for the entire mobile home park’s monthly water
bill, amount owed to the utility provider, and amount paid by park management. Property
managers must also provide the formula used to calculate the amount each mobile home
resident owes for water. No additional administrative fees for water utility billing are allowed.
If water is included in the rent as an amenity, there are currently no rules regarding transparency
of water billing.
We are exploring a rebate program to assist residents with the water portion of their bill.
36Utilities Pandemic Assistance
Residential Commercial
1033 customers 29 customers
$398,390 total funding spent $41,488 total funding spent
$386 - average per customer $1,431 - average per customer
Fort Collins Utilities received $469,000 from Platte River Power Authority and $381,550 from the American
Rescue Plan Act (ARPA) to directly support our customers in need as a result of the pandemic.
As of October 18, 2022,the following has been allocated:
A new program was developed to reach property managers, who will be able to apply for these funds to
cover inactive accounts that have been unpaid.
37PUC
The current PUC requirement on regulated public utilities is as follows: Utilities must offer
a Percentage of Income Payment Program (PIPP)that is designed to ensure consumers are
not paying more than six percent of their monthly income on electric and natural gas bills ...
The income threshold for eligibility for the program sits at 185 percent of the Federal Poverty
Level, or 60 percent of the State Median Income. In Colorado, the State Median Income is
$100,760 for a four-member household, making that family qualified at $60,456.
38The Utilities Affordability Programs Team